Open Access. Powered by Scholars. Published by Universities.®
Capital Structure, Partial Adjustment Process, Corporate Governance, Principal Component Analysis, REITs, Option Valuation, Volatility Mean Reversion
Articles 1 - 1 of 1
Full-Text Articles in Business
Two Essays: “Does Corporate Governance Affect The Adjustment Speed Towards Target Capital Structure?” And “Do Option Traders On Reits And Non-Reits React Differently To New Information?”, Li-Kai Liao
University of New Orleans Theses and Dissertations
The first chapter investigates how corporate governance influences firms’ capital structure behavior. Based on the premise that costs associated with deviations from the target capital structure are positively correlated to the extent of deviation, we hypothesize that the initial deviation from the target will be shorter for a firm with good corporate governance than for a firm with poor corporate governance. We also hypothesize that the former group will employ a higher speed of adjustment towards target than the latter group due primarily to the following reasons. First, a firm with well-placed governance system will adjust at a faster rate …